With the “Shanghai-London Stock Connect” evolving into a wider “China-Europe Stock Connect”, many Chinese companies that are involved in the Li-ion battery industry are planning to issue GDRs in European exchanges so as to expand their overseas funding channels and internationalize their business operations. These companies include battery manufacturers, raw material suppliers, and component suppliers (e.g., those that sell cathodes, anodes, separators, electrolytes, etc.).
Several major news platforms include IFR and Bloomberg reported on February 1 that CATL is considering to raise USD 5-6 billion for issuing GDRs in the SIX Swiss Exchange. The undisclosed sources that have knowledge of this plan said CATL has already undertaken internal discussions and consultations on getting listed and issuing GDRs, and this event could happen as early as this year.
The other major Chinese battery manufacturers Gotion Hi-Tech and Sunwoda have successfully gotten themselves listed on the SIX Swiss Exchange. Gotion began issuing GDRs in July 2022, and it has raised around USD 685 million through sales of 2,283 units of GDRs. Sunwoda began issuing GDRs in November 2022, and it has raised around USD 440 million through sales of 2,875.9 units of GDRs.
CATL started to speed up the pace its overseas expansion activities in 2022. With regard to courting foreign clients, CATL have established partnerships, in succession, with the following major carmakers: Ford, Mercedes-Benz, BMW, Daihatsu Motor, and Honda Automobile (China). CATL has also formed ties with solution providers and investors in the energy storage market, including FlexGen and Primergy Solar from the US and Gresham House from the UK.
Turning to capacity building, CATL has been quick to build overseas factories. Its plant in Arnstadt, a city in the German state of Thuringia, formally entered operation this January. The construction of the plant began in 2019, and CATL has invested around EUR 1.8 billion into this project. The initial production capacity of the plant is set at 14GWh per year. Once it is fully ramped up, the plant is expected to output around 30 million pieces of battery cells per year. This amount is sufficient to meet the battery installation demand of 185,000-350,000 electric vehicles per year. Earlier, CATL received permission from the German government to set up 8GW per year of production capacity for Li-ion battery cells, and the company achieved mass production in Germany in December 2022. Also, in August 2022, CATL announced it will land its second European plant in the Hungarian city of Debrecen. The investment in this project is planned at EUR 7.34 billion. Currently, CATL has the capability to locally supply batteries to European carmakers.
Besides Europe, CATL is also expanding into other regions of the world. In April 2022, CATL announced that it will be collaborating with two enterprises controlled by the Indonesian government to develop an integrated battery manufacturing project that encompasses nicking mining and processing, EV battery materials, EV battery manufacturing, and battery recycling. The total investment in this project is set around USD 6 billion. Additionally, CATL is reportedly searching for a site in Mexico to set up a battery plant. According to the sources with knowledge on this matter, the proposed plant in Mexico will entail an investment of around USD 5 billion. It is expected to manufacture batteries used in Ford’s and Tesla’s vehicles.
This article is a translation of a Chinese article posted by Wendy at TrendForce. It contains information that is either sourced from other news outlets or accessible in the public domain. Some Chinese names are transcribed into English using Hanyu Pinyin.
Image Source: Website of IFR